Tax write-off for charity work?

[Jim Cooper]

Hi guys,

I don't have an easy answer on this question, but I know (think?) there should be a method.

We often encounter and participate in fantastically successful fundraisers for charities. The CKCA has been paramount in a yearly donation effort, and I have also been involved in the March of Dimes Bowie projects for a few years, among others.

I work for a non-profit organization. When someone donates equipment to us, we have the ability to write a note of in-kind payment for the value of the item (in my case rowing boats or equipment) which can then be used as a tax write off for the individual.

They help themselves twice: first by their generous donation, and then we reciprocate in giving them a legitimate tax write-off.

You can see where I am going on this....

If each of the donation participants would be allowed to create an invoice of some form for the work and materials involved (and this would have to be fair) then the recipient organization for the proceeds should (must?) provide a letter of acceptance of this work as a tax write-off.

I am assuming that the invoiced amounts would still fall short of the charity proceeds.

Thoughts on this? Experience? This could have a BIG impact on the participation level for now and in the future. And, it's only fair.

Let's discuss.

Coop

[Kevin Jones]

Hi Jim, I'm not sure how other organizations handle their chartable reimbursement/receipt/documentation process, however the CKCA settles up with our team member donors when our cancer research benefit knives/sheaths are finished and all photography and promotional materials have been completed.

At that point our donors can invoice us for both reimbursable and non-reimbursable materials, supplies, labor, services, sheaths, shipping and secondary vendor services. Some non-reimbursable invoices can be written off by contributors.
Donated labor and services (which is the majority of what our contributors supply) can not be written off as a tax deduction. Property, materials (ivory handle material for example), supplies, equipment can be.

We have had very few requests for reimbursements and/or documentation for donations from contributors of our past charitable projects. Our contributors/participants for our Cancer Research Benefit Knives have been very generous with both their time and resources.

[Jim Cooper]

Thanks Kevin. The underlined line above is exactly what I was misstaken. Upon searching further on the net I also came upon a FAQ about this directed towards 501c(3) Charitable Organizations:

8. Can I Take a Deduction for My Volunteer Work?
No, you can't deduct the value of your time spent on charitable work as a charitable donation, but you can deduct your out-of-pocket costs such as mileage.

My question was hoping there may have been a method for labor to be accounted for. It's not a bad wish.

Readers, please don't take this as a finger pointing at the CKCA. I was only exploring further options. Kevin's guidance has always reimbursed me for my costs of materials, etc.

A valid question answered.

Coop

[Kevin Jones]

^Jim a valid question in deed and timely as well as we are currently in the application process for the CKCA becoming a 501(c)(7) tax-exempt organization as opposed to a 501(c)(3) non-profit organization.

The (7) should be best for the CKCA in maintaining our growth and accomplishing our early goals.

It's unfortunate that the contributors to our annual knife benefits projects can't deduct the value of their labor, however it's not hard to see why the ruling exists as it would be difficult if not impossible for the IRS to accurately police labor values claimed on a broad basics.

[Paul Long]

As a multiple event provider/contributor, it has always been my pleasure to be able to "donate" my materials and efforts, and I feel sure the rest of the guys who have participated feel the same way. I am very proud to be a member of an organization that actually makes a difference by virtue of substantial donations to various cancer research projects.

Paul

[Jim Cooper]

Originally Posted by Paul Long

As a multiple event provider/contributor, it has always been my pleasure to be able to "donate" my materials and efforts, and I feel sure the rest of the guys who have participated feel the same way. I am very proud to be a member of an organization that actually makes a difference by virtue of substantial donations to various cancer research projects.

Paul

Paul, you are the first to lend a hand. I fully understand this. Thank you.

In my 10+ years of working with knives, I have donated time to over 10 charity or special needs benefits. We did this regularly on The Knife Network and had a specific forum for charitable needs, which I was a primary moderator. I have given, and will continue to do so. I'm not grumbling.

I raise this question, only in the thoughts that there may have been a foreheaded-planting slap which we overlooked all along. he he he!

As I stated earlier, any charitable foundation is capable of issuing a tax write-off for donated tangible goods. They do this with absolutely no penalty to them. (A tax write-off for $100 is NOT getting $100 back. But, it would help.) That the CKCA goes beyond, and ensures there is a full reimbursement of tangible goods = Wonderful.

This is all clear to me--and anyone else reading this.

Looking forward to my next project.

Coop